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Edited version of private advice
Authorisation Number: 1051789628696
Date of advice: 10 December 2020
Ruling
Subject: Income tax - capital gains tax
Question
Did the CGT event occur when you entered into the contract to sell the shares?
Answer
Yes. The sale of shares from you to your related trust is a CGT Event A1. Under paragraph 104-10(3)(a) of the Income Tax Assessment Act 1997, CGT event A1 happens on the X July 20XX (the date you entered into the contract to sell the shares). This outcome does not change by the fact the settlement has been delayed. Further information on the timing of CGT Events can be found by searching 'QC 52166' on ato.gov.au
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commences on:
Y ZZZZZZ 20XX
Relevant facts and circumstances
You are an individual who acquired shares on ASX via a broker.
On X XXXXXX 20XX you created a trust of which you are the trustee and beneficiary.
On the same day you also applied for a share brokering account in the name of the trust.
On the same day you entered a contract to sell your shares to the trust.
Due to unforeseen circumstances the broker had delays in processing the application and setting up the trust's account resulting in a number of days delay in the shares being transferred to the trust.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 104-10